BOGO discount profit.

Worked example

A store sells a $40.00 item that costs $16.00 to buy, pack and ship, so a normal order earns $24.00. It runs buy one get one free. A deal basket brings in $40.00 for two units that cost $32.00, so it earns $8.00, a 20.00% margin; the effective discount on the basket is 50%. If 60% of promotion orders take the deal and 40% still buy one unit, the blended profit is 0.6 x $8.00 + 0.4 x $24.00 = $14.40 per order. A normal 500-order period earns $12,000. After $300 of promotion cost, 900 promotion orders earn 900 x $14.40 - $300 = $12,660, only $660 more, and the break-even is 855 orders (rounded up), 70.83% more than normal.

How it works

Deal basket profit = price + price x (1 - second-item discount) - 2 x unit cost. A free second unit is a 100% discount on that unit, which is 50% off the basket, so a buy one get one free deal gives away half of the basket price on every deal order.

Blended profit per order = take rate x deal basket profit + (1 - take rate) x single-unit profit. Shoppers who buy one unit still pay full price, so a low take rate softens the cost, but it also means fewer extra units are sold.

Break-even orders = (normal-period profit + fixed cost) / blended profit per order. The page compares order counts, not unit counts, because a deal order moves two units. If the deal basket loses money and every shopper takes it, no number of orders breaks even.

Use your own take rate from a past promotion, or from the share of orders carrying two or more of the discounted item. This tool assumes a deal order holds exactly two units of the same item and that unsold stock costs nothing extra.

Sources

Retrieved 2026-10. The formulas are arithmetic on your inputs; the sources below are the rules and standards this page refers to.

• FTC Guide Concerning Use of the Word "Free" and Similar Representations, 16 CFR Part 251: names "Buy 1-Get 1 Free" and "2-for-1" offers, defines the regular price as the price openly and actively sold at over a substantial period (a 30-day period), and says the seller should not recover the free unit by marking up the required purchase (section 251.1(b)); conditions should be disclosed at the outset (251.1(c)).

Everything runs in your browser. Nothing you type is sent or stored. This is a planning aid, not legal or accounting advice.

FAQ

Is buy one get one free the same as 50% off?

On a two-unit basket, yes: you give away the price of one of two units, so the basket is 50% off. Buy one get one half off is a 25% discount on the basket. Enter 100 or 50 as the second-unit discount to see each.

Why compare orders instead of units?

A deal order sells two units, so unit counts would hide the fact that each deal basket earns less. The tool counts orders because that is how traffic and conversion are measured.

What take rate should I use?

Use the share of orders that included two or more units of the discounted item in a past promotion. If you have no history, test a low and a high rate and look at the break-even order count for each.

Can I raise the price to pay for the free unit?

In the US the FTC "Free" guide says shoppers can assume the free unit is not recovered by marking up the item they must buy, and the regular price means the price you actually sold at over about 30 days. Check the rules that apply where you sell.